Alternative asset funds are adapting to keep pace with the significant and growing demand from investors, according to new research by the Alternative Investment Management Association.

Institutional investors are looking to the funds amid ultra-low bond yields because of their need for steady performance. While the traditional appeal has been the funds’ “high-octane performance,” institutional investors are hungry for new ways to maintain consistent returns, moving towards their specific targets, according to the survey.

Alternative funds continue to see the most investment action from institutional investors, with endowments leading the way, followed by pension plans. Asian and Middle Eastern pensions are becoming more integral players, as well as an important source of capital for alternative asset funds as the middle class in those regions continues to grow. British and continental European pension funds are expecting to allocate even more towards alternatives going forward.

The survey also found word of mouth plays an integral role in how institutional investors decide where to allocate to alternative asset funds. “It’s all about people. Digital distribution doesn’t work for alternatives. Institutional allocators talk to each other, a lot, and word-of-mouth referrals are a big source of new business,” noted one U.S. asset manager in the survey.

As such, a lot more networking is in the works for alternative firms, with sales people now required to be experts on the technical side of products. As well, conferences are becoming more popular, with many firms hosting their own, the survey found.